The IRS taxes gifts made over a certain dollar amount. They insist on us signing a 'gift letter' to certify that the funds from my parents are not debt financing and that we will not owe interest payments to them.If you are buying a single family home as a primary residence, you can use gift funds without contributing any of your own money to the down payment. A gift letter is a note from a donor to your lender regarding cash funds for your mortgage down payment. Your brother provides a letter stating that it is a gift, and no repayment is required. That's all he has to do. (E) The records should be complete and adequate and all sales and purchases should be properly accounted for in the records. Here's a sample gift letter you can use to prove that the money is truly meant as an outright gift, with no expectation of repayment. Payroll Tax Seminars: The EDD offers no-cost seminars to help employers comply with state payroll tax laws.